The syntax you should use to set parameters strictly depends on how you are embedding the Carousel in your page (object tag, embed tag, swfObject script, etc.); please refer to How to embed a Flash file for more information. Embedding parameters that are relevant to the Carousel are:

Using flashvars you can specify the following parameters for the Carousel:

xmlfile
The xml file containing photo list and options (”./default.xml” by default). Relative paths are intended as based on the html page location; if the loading fails a further attempt is made resolving relative paths as based on the Carousel.swf location.
Of course you can specify as xmlfile the url of a script that generates the xml file on the fly.

loadercolor
The color of the loading message (#CCCCCC by default). Always use 6 hexadecimal digits format; do not use color names or 3 digits format.

messages
You can use this variable to customize/localize the various messages show by the Carousel while and after loading. Refer to this example for more information.

Set it to always if you have links to JavaScript functions. This may also be required if you have link on images with target=“_blank” (on certain browsers open a link in a new window is equivalent to a JavaScript call).

In Carousel 1.5 the quality was forced to BEST, but I decided to revert this choice because it affects performances too much.
So from Carousel 1.7 the quality is left to it's default value: HIGH. If you want to can set it to BEST explicitly.